Energy stocks help TSX to higher close; Valeant weighs

Alastair Sharp

3 Min Read

TORONTO (Reuters) - Canada’s main stock index rose on Thursday as energy stocks gained from a bounce in oil prices, while drug maker Valeant Pharmaceuticals International Inc (VRX.TO) slumped on a report it is the target of a criminal probe.

The energy group rose 1.2 percent, leading gains after the broader index broke a five-day winning streak on Wednesday.

The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE ended up 21.02 points, or 0.14 percent, at 14,796.06. The index at one point hit a 13-month intraday high of 14,855.69.

“The Canadian market this year is I think overextended,” said Barry Schwartz, portfolio manager at Baskin Financial Services. “It is a little bit of a silly rally.”

Oil prices jumped the most in a month after the Saudi oil minister spoke about possible action to stabilize prices and the International Energy Agency predicted supply should tighten in the coming months after several years of overproduction.

Schwartz said he has avoided energy stocks - a major force on the Canadian index - so far this year given a lack of certainty on future prices, and that he expects commodity stocks to snap back from recent gains.

“I wouldn’t be surprised to see some of the commodities be the worst performers in the second half of the year,” he said.

The most influential drag on the index was Valeant, which fell 11.2 percent to C$31.76. The Wall Street Journal reported the drugmaker is the subject of a criminal probe over whether it hid from insurers its relationship with a specialty pharmacy.

Valeant stock had surged 25 percent earlier this week after it unveiled a plan to raise billions from asset sales.